Our Current Use of Resources
In 2022/23 the resources available to Renfrewshire IJB are projected as follows:
Resources available (£000s)
NHS GGC - £186,478
Set Aside - £67,433
Renfrewshire Council - £93,640
Total 2022/23 resources available (£000s): £347,551
A Refreshed Financial Plan
The Medium Term Financial Plan 2020/21 - 2025/26 outlined the anticipated financial challenges and opportunities the Health and Social Care Partnership expected over that five-year period, and provided a framework which would support the HSCP to remain financially sustainable. It was designed to complement the HSCP's Strategic Plan, highlighting how the HSCP's financial planning principles would support the delivery of the IJB's strategic objectives and priorities.
The unforeseen events of the COVID-19 pandemic created considerable unanticipated pressures for the IJB and prompted a shift in the focus of the HSCP and our partners' activities. As noted previously in this Plan, the pandemic has accelerated the delivery of some of our objectives, made others increasingly important, and lowered the priority of some of our previously agreed actions. Alongside the development of this Strategic Plan, it is consequently necessary to update our supporting Medium Term Financial Plan.
The new Medium Term Financial Plan 2022/23 - 2025/26 reflects the impact of COVID-19 and other emerging issues facing the HSCP. The Plan is intended to outline, in broad terms, the specific service and funding issues over the next three-year period and how the IJB will work towards achieving financial sustainability and resilience, and delivering its priorities. The IJB's financial planning arrangements remain subject to active review, to enable us to continue to plan for a range of potential outcomes and scenarios. This helps us to manage emerging financial risks and challenges and the likely impact these could have on the financial position of the IJB.
National Context & Planning Uncertainties
As with this Plan, the Medium Term Financial Plan must be cognisant of, and responsive to, the national context. This includes both considerations around policy but also the public health emergency caused by the COVID-19 pandemic. The impact of such issues on our ability to deliver services, how we deliver them, and on the budgets available with which to fund those services, has been acutely felt over the past 18 months and shows little sign of abating.
Examples of these contextual factors include, but are not limited to:
COVID-19 & NHS Recovery
The pandemic has had far-reaching consequences for Scotland's public services and finances, and it will continue to have an impact in the future. The Scottish Government's NHS Recovery Plan, published in August 2021, states its intention to increase NHS capacity by at least 10% in order to address the backlog in care and meet ongoing healthcare needs. The Plan identifies required investment of more than £1 billion to deliver improvements over the next five years, and sustainable services for the future.
National Care Service
As previously covered, the result of the consultation on the establishment of a National Care Service in Scotland may lead to significant structural change in the sector, impacting service providers and HSCPs alike. Whilst such change is not expected imminently, the Medium Term Financial Plan will focus on the delivery of the priorities of the Strategic Plan and the principles set out in the Independent Review and NCS Consultation which can be delivered upon in advance of any necessary legislation and structural changes.
Supply Chain and workforce challenges
The impact of Brexit on the health and social care sector continues to emerge. Supply chain issues are being experienced nationally and globally, and health and care services continue to face shortages across the workforce in key services. These issues are dovetailing with the impacts of the pandemic, compounding already challenging circumstances. The MTFP will consider how the IJB's resources can be best targeted to address the ongoing effect of this.
Other Challenges
The examples highlighted within the national context are not exhaustive. The complexities here also extend, but are not limited to, the planning uncertainties facing the IJB in terms of national environmental policy and the commitment that Scotland will be a net-zero society by 2045.
The Scottish Government's Programme for Government also states the intention to hold a new independence referendum in the first half of the parliamentary term should the COVID crisis have passed.
Local Context
The local context also remains very uncertain. Health inequalities, made more challenging and exacerbated by the pandemic, are expected to continue to increase demand on health and social care services in Renfrewshire. The full extent of this is still be determined however, evidence suggests that demand for mental health support in particular will rise, along with the potential impacts of long COVID. Our local response to these issues will require a targeted approach.
In addition, Renfrewshire's own target to be carbon neutral by 2030 will require consideration of how we invest in goods and services in the future to ensure the IJB is operating to support delivery of these targets.
Ongoing Financial Challenges
The Scottish Government published the 2022-23 Scottish Budget and the Medium Term Financial Strategy on Thursday 9 December 2021. Despite hopes for a return to multi-year settlements, the 2022-23 budget was for one year only, with a commitment from the Scottish Government for a full Resource Spending Review in May 2022. The Review will aim to set out the government's long-term funding plans and the roadmap for delivering key commitments, such as the establishment of the National Care Service. Nevertheless, the continuation of single-year settlements at this time is challenging for the HSCP and continues the uncertainty for our future medium term financial planning, and that of our funding partners.
Even with the commitment of the Scottish Government to increase spend in health and social care, we anticipate the challenge to the IJB to deliver a balanced budget over the next three-year period will be considerable. Future pay settlements, contractual commitments, and rising prescribing costs are expected to continue to add to the challenge facing the IJB in the medium term.
The volatility of UK inflation, impacted by record global energy cost rises, will also present a considerable challenge. Currently at 5.5% - its highest level in almost 30 years - latest predictions from the Bank of England at the time of writing this Plan are that inflation will peak at 7.25% in April 2022, far exceeding the Bank's 2% target. Such pressure will impact both the sustainability of our external providers, who will struggle to cope with the rising cost of goods and services, and the HSCP directly, as our providers will have little choice but to pass on those rising costs to us.
Adding to these challenges is the aforementioned issue of recruitment and retention, intensified by the high levels of non-recurring monies; fixed term funding making roles less attractive and diminishing our candidate pool.
The IJB's Risk Framework will help address risks to delivery of the MTFP and the reshaping of our transformation programme will help to meet these challenges. However, a significant budget gap is still expected.
In this context, the HSCP's Senior Management Team has implemented a rolling process to identify savings proposals which can contribute to financial sustainability and ensure the continued delivery of best value. Each proposal is subject to rigorous risk and impact assessment of possible risks and, where necessary, equality impact assessments (EQIAs) are also carried out to determine and manage any potential unintended negative impact on the different groups covered under the Equality Act 2010.
Next section:
Market Facilitation - Setting out our principles for future commissioning
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